Digital transaction liability framework amended
The Reserve Bank of India has issued final Amendment Directions to enhance customer liability limits in unauthorised digital transactions. These new rules, effective January 1, 2027, also aim to speed up complaint processing and introduce compensation for small-value fraudulent transactions.
Strengthening customer protection
The Reserve Bank of India has issued final Amendment Directions to broaden the scope of existing instructions on limiting customer liability in unauthorised electronic banking transactions.
The updated framework will now cover other categories of fraudulent digital transactions.
It also aims to significantly reduce the time taken by banks to process complaints related to such fraud and introduces a compensation mechanism for small-value fraudulent electronic banking transactions, thereby strengthening consumer safeguards.
Broad application, future effect
These Amendment Directions incorporate modifications based on stakeholder feedback received on the draft issued in March 2026.
The new rules will come into effect from January 1, 2027.
They apply to a wide range of financial institutions, including Commercial, Small Finance, Payments, Local Area, Regional Rural, Urban Co-operative, and Rural Co-operative Banks, ensuring consistent application across the banking sector.